A property owner transfers title to a friend with no monetary consideration and no other form of compensation exchanged. How does the Illinois Real Estate Transfer Tax Act treat this transaction?
Correct Answer
C) The transfer is exempt because no consideration was paid
Under the Illinois Real Estate Transfer Tax Act (35 ILCS 200/31-45), transfers made without consideration — i.e., bona fide gifts — are exempt from the state real estate transfer tax. The exemption applies to any transfer where no monetary or other valuable consideration is exchanged, regardless of whether the parties are related. The deed must recite the exemption basis to qualify.
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Related Topics & Key Terms
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Related Concepts
In the context of foreclosure, a deed transfers ownership of the foreclosed property to the new owner, typically the buyer at a foreclosure sale.
Discount points are upfront fees paid to a lender at closing to reduce (buy down) the interest rate on a mortgage loan. One point equals 1% of the loan amount and typically reduces the rate by approximately 0.25%.
An FHA loan is a mortgage insured by the Federal Housing Administration that allows lower down payments and credit scores than conventional loans. It is designed to help first-time homebuyers and borrowers with limited resources.
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